Nigerian banks’ loans to oil sector jumped by 78% in 2023
Ilenre Irele
Oil and gas firms’ exposure to banks in the country had jumped by 78.44 per cent to N11.8 trillion at the end of 2023, in contrast to N6.615 trillion recorded at the end of 2022, according to credit data released by the Central Bank of Nigeria (CBN).
Month-on-month, the CBN, in its Quarterly Statistical Bulletin for the fourth quarter of 2023, reported that total credit to oil and gas at the end of 2023 was an improvement of 8.5 per cent compared with the credit of N10.88 trillion advanced to the oil firms in November 2023.
Giving a breakdown of banks’ credit to the oil and gas industry, the CBN noted that upstream and downstream production companies’ exposure stood at N8.365 trillion by December 2023, compared with N7.836 trillion at the end of November 2023, while it stood at N4.706 trillion in December 2022.
According to the CBN, banks extended N3.438 trillion credit to oil and gas services firms at the end of December 2023, rising from N3.042 trillion from November 2023 and N1.908 trillion recorded in December 2022.
On the other hand, total credit to power and energy firms stood at N1.322 trillion at the end of December 2023, rising by 46.15 per cent compared with N904.456 billion extended to the power firms at the end of December 2022.
In addition, the apex bank disclosed that credit to power firms in December 2023 represented an appreciation of 11.28 per cent compared with N1.188 trillion credit advanced to the firms at the end of November 2023.
Giving a breakdown of banks’ credit to power and energy firms, the CBN stated that power and energy firms in the industrial segment of the economy received total credit of N823.312 billion by December 2023, compared with N737.678 billion in November 2023 and N607.049 billion by December 2022.
The CBN further reported that banks extended N498.513 billion, N450.192 billion and N297.407 billion to power and energy servicing companies by December 2023, November 2023 and December 2022, respectively.
Furthermore, the central bank noted that banks’ credit to oil and gas firms accounted for 26.5 per cent of total credit advanced to the economy by the banks at the end of December 2023, compared with 22.46 per cent of total credit at the end of November 2023 and 26.12 per cent of total credit advanced to the economy by December 2022.
On the other hand, total credit to power and energy firms accounted for 2.97 per cent of total credit to the economy in December 2023, a decline from the 3.07 per cent of total credit advanced to the economy in November 2023 and 2.85 per cent of the total by December 2022.
